The rise and the sudden fall in the finance of the dough
In July 2024, Dough Finance, a Florida-based DEFI platform promising “loop” yields to pull up, fell into a loss in Flash fuel which drained $ 2.5 million from user accounts. The feat not only destroyed investor funds, but also aroused operations.
Chase Herro and Zak Folkman founded Dough Finance in 2024 in Florida. The platform has attracted investors by offering high-risk DEFI strategies such as the loop, a process where traders reuse the borrowed crypto. Here’s how the loop works:
- First of all, a trade files a cryptographic asset in a loan protocol. This deposit acts as guarantee. Then, the trader borrows another cryptographic asset, often a stablecoin, based on the collateral value.
- Then the merchant takes the crypto borrowed and bought more from the original asset. The cycle is repeated with more deposits and loans; This is the buckle process.
The objective is to earn more exposure to the original assets. If the price increases, the merchant achieves more benefits than they would do with their initial deposit.
However, everything separated from a flash loan attack in July 2024. The hackers targeting the DEFI protocol manipulated the intelligent contract and fled with around 2.5 million dollars of cryptocurrencies.
The loss of $ 2.5 million was the highlight in the Dough coffin. Investor Jonathan Lopez, who filed $ 1 million based on the encouragement of the co-founder Chase Herro, saw his savings evaporate. It would have been advised step by step thanks to the loop strategy just before hacking.
Despite the promises to compensate for users via owners convertible to ether (ETH), only $ 281,000 have been recovered. Communications were silent in August 2024 and, in May 2025, Lopez had filed a complaint for fraud against Herro. Its hearing date is set for Florida in April 2026.
This affair highlights an increasing trend: users are increasingly looking for a legal recourse for the cryptographic platforms missed once unofficial insurances collapse.
Relaction under a new banner: the birth of World Liberty Financial
Barely two months after the stripping, Herro and his partner Zak Folkman relaunched under a new banner, World Liberty Financial (WLFI), making his debut in September 2024.
Their new DEFI platform quickly made the headlines thanks to high-level donors: US President Donald Trump and his sons. The partnership would have taken shape by Steve Witkoff, a property developer and an American special envoy in the Middle East, who facilitated the link between the besieged founders and the Trump camp.
Flush with a new capital, the project has embarked on a wave of purchase, amazing an ETH portfolio, Enveloped Bitcoin (WBTC), USDC (USDC) and USDT from Tether (USDT). Basically, a non-transferable governance token called WLFI, an unusual design choice for a brand platform as “decentralized”.
But it was not the tokens that aroused controversy. It was the money flow.
Following two tokens sales, including a successful round in March 2025, the platform said it has raised $ 550 million. However, the income division was anything but decentralized: 75% of all income from the Net Protocol were sent to DT Marks Defi, an entity linked to Trump. The remaining 25% went to a company belonging to Herro and Folkman.
In real terms, the Trump family would have pocketed $ 400 million, while the finance founders in the past in the past stripped with at least $ 65 million, a spectacular reversal of fortune for a pair that had lost $ 2.5 million a year earlier.
Critics were quick to call irony: a platform that occurs as decentralized but operates under an intensely centralized structure. The silent reappearance of Herro and Folkman, especially since the allegations of fraud of their previous enterprise do not remain resolved, only added fuel in the buttress.
World Liberty, however, is just one element of an broader Trump-Family cryptography ecosystem that develops with surprising speed.
Trump launched a same name called Trump (Trump) on Solana earlier this year, followed shortly by the official Melania even (Melania), a similar token published by the First Lady. Meanwhile, Eric Trump co-founded a cryptocurrency mining company called American Bitcoin, with Donald Trump Jr. listed as partial part. More recently, Trump Media and Technology Group made a proposal to the SEC in the United States on June 5, 2025, to launch a fund (ETF) negotiated in exchange (ETF) Bitcoin (BTC), The Truth Social Bitcoin ETF.
Together, these companies form an increasingly vague line between politics, personal enrichment and crypto, a line that Herro and Folkman have now positioned themselves squarely inside.
What the finance of the dough has promised after hacking and what did not happen
Although the finance of the dough has become dark after its collapse in July 2024, the project was not faded with the regulators’ radar. In fact, it only enters the legal and investigation projectors now.
Dough Finance published a post-incident recovery plan committing to “make users whole”. The proposal has described a three -part strategy:
- Redistribute the funds recovered by a governance vote on a pro rata basis.
- Make paste tokens to compensate for the unrealized losses, with the promise they could be used in the ecosystem of the platform.
- Burning and re -evaluation mechanism allowing users to exchange these tokens for additional recovered funds in the future.
The platform has also credited Seal 911, a cybersecurity company, for supporting the response to incidents and has focused on transparency in the future.
However, affected users say that none of these promises have materialized. Governance vote has never been held, paste tokens have never been listed or usable, and no additional funds have been recovered beyond an initial partial reimbursement of around $ 281,000. In June 2025, the platform had become silent, leaving investors like Lopez to continue legal action.
According to testimonies, Lopez’s trial in May 2025 accused the co-founder Herro of false declarations, fraud in securities and violation of the fiduciary obligation. The case, scheduled for April 2026, could help define how the courts manage the founders DEFI which directly guide investors through high -risk strategies such as the loop.
As part of the CS / HB 273 in Florida, any platform transmitting user funds must contain a silver issuer license. If the financing of the dough works without one, it can be exposed to a regulatory examination as a business of monetary services without license. In mid-2025, no criminal accusation was filed, but the Florida financial regulation office (OFR) continues to monitor the fraud of digital assets and cases of non-registered securities, which suggests that this can only be the beginning.
This model of flight communications, vaporware tokens and silent pivots made comparisons with the collapses of previous deffi such as Safemoon and Bitconnect. But unlike many deceased founders, Herro and Folkman have not disappeared – they have reappeared under a new name and have taken big.
Is World Liberty Financial really sure?
After collecting $ 550 million and attacking Trump’s name, WLFI could look like a powerful Defi success. But for anyone who follows the journey of Chase Herro and Zak Folkman from the finance of the paste with WLFI, a question persists: is it sure?
The warning panels are familiar.
At Dough Finance, users have been promised advanced DEFI strategies and post-hack reimbursements. What they got was silence, missing funds and vaporware tokens. Today, with allegations of always active fraud, the same founders now control a new platform with even more capital, more complexity and more political weight.
WLFI uses a non -transferable governance token (WLFI), offers little user control over the treasure allocation and funnels of 75% of the protocol income to an LLC linked to Trump. It is far from the community, decentralized ideals, users DEFI are invited to expect.
So what can investors learn?
- Trust the history, not the titles.
- It is not because a project is politically linked or rich in cash that it is transparent, secure or equitable.
The rise of WLFI, built in the shadow of the collapse of the finance of the dough, is a powerful reminder: in Defi, “Back Again” does not always mean “better”.
If you are wondering if WLFI is safe, consider this: trust your assets with a platform that the founders have still not responded for the last?
If your answer is no, you are not paranoid. You pay attention.
In Defi, the recycled founders are not delivered with recycled responsibility. If the past is a guide, this project deserves an in -depth examination, not blind confidence.
